Does This Debt Make Me Look Guilty? [25 May, 2009]

Debt is the little black dress in everybody’s wardrobe. You may not want it, it doesn’t really excite you, but you’re encouraged to have one because you never know when you might need it. Debt usually starts off being called credit, and credit is supposed to be a good thing to have. A British friend of mine recalls arriving in the United States, some years ago, without a credit record. His finances were in scrupulous order, he didn’t owe anybody a dime, he paid his bills on time, and he had a well-paying job. The trouble began when he tried to engage in any substantial financial transactions – without a credit record in the United States, you simply don’t exist. He ended up having to buy things he didn’t want, on credit cards he had no desire to own, all in the name of “building up a credit history.” As he put it wryly, “I had to borrow money I didn’t need in order to prove they could lend me money I might need.”

Today, vast numbers of people in the U.S. are in debt, and I happen to be one of them. Sometime in 2008, I got sick and tired of paying the credit card company money I didn’t have. Eventually, I was taken to debtor’s court and, at this point in time, the creditors and I face each other with somewhat different agendas in mind. They’d like to collect what they’re owed, and I’d like to make more money. My experience in debtor’s court, which I’ll write more about in the coming months, revealed that while there may be no official debtor’s prison, people who incur debt in the United States are in fact caught in a system that is, for all intents and purposes, not all that different from the nightmarish conditions described in Charles Dickens’s novel Little Dorritt. When I made the comparison, a friend reminded me that there were no shackles and chains involved these days. She’s right, of course, although even that might be changing, if recent stories about debtors being put in prisons are any indication.

But for now, what I really want to focus on is the issue of guilt and related emotions that are attached to debt. On the face of it, it might make sense to feel guilty about debt. Or does it, really? The logic around debt goes something like this: Debt is something you incur, it’s something you should not have incurred, and something you ought to pay off as soon as you can. But some of us might not feel quite so sure about all that – my friend K. literally thumbs her nose at the creditors and says, “They shouldn’t have lent me the money, given what they knew about my finances.” That kind of rationale was, as we know, popular in the wake of the subprime mortgage crisis. For a while, it looked like there was actually going to be a widespread and sustained critique of the system that had taken so many people to the brink of bankruptcy and beyond. And it seemed like we might start looking at other parts of the financial system with the same critical eye. But that critique is being replaced by a culture of blame that now seeks to find new ways for you to feel guilty about your debt. Take, for instance, the recent news that banks, frustrated by the soon-to-be-mandated limits on the hitherto exorbitant fees on people who fall behind on payments, might now consider going after “good” clients by “reviving annual fees and eliminating or reducing grace periods for paying off card debt.”

The result is a pitting of “good” versus “bad” credit card holders, and the comments on a recent NYTpiece about the proposed changes are filled with the ire of huffy consumers like “jenn,” who writes: “Surprise! Once again the thrifty among us will pay for the profligate.” In other words, the “profligate” among us should feel guilty for making those nice thrifty people pay for our nasty spending habits.

To be fair, I don’t think that most people really believe that this tactic is anything more than the desperate rumblings of the credit card industry (and, to be cynical, I also think it’s worth examining the fine print in the changes to the law before we get too enthusiastic about them). But that kind of simple division between good and bad, thrifty and profligate is an indication of the extent to which ours is a culture of affect, and the extent to which emotions like guilt pervade even our financial lives.

Because, when you look at it, why feel guilty about your spending habits or your debt? Isn’t it bad enough that a lot of us feel desperate and overwhelmed by debt? Isn’t it unfair that many of us spiral into debt because of medical emergencies that land us in bankruptcy? Instead, we’re distracted from the conditions that create debt and made to believe that debt somehow accrues as a result of some moral failing, for which we should eventually repent. Sure, every now and then Dr. Phil or Oprah might find a family that’s tens of thousands of dollars in debt because the mother has an obsession with shoes and lets her family starve while she sashays around the mall looking for new clothes. And the shows inevitably feature Suze Orman who will, fingers literally wagging, scream at the mother and tell her how selfish and stupid she’s being.

But, really, even putting aside the question of whether or not these families really got there because of pure greed and irresponsibility, are such people really the norm? Can we, in the case of the average debtor, really find such easy ways to connect debt to something so emotional as the desire to be meaningless consumers, or the inability to see that our families are starving? Orman loves scolding people for their “bad” spending habits, but she never critiques the larger system that sets people up to fall into pits of debt in the first place. And she doesn’t tell audiences that she’s a paid spokesperson for the developers of FICO, the credit score formula that she claims provides the most important financial score they should track. After all, revelations like that, if made up front, might undermine her image as someone who’s just trying to help people, and instead reveal that she’s created a business conglomeration out of making people feel bad about their debt. Orman and others turn debt counseling (and even putting those words together is symptomatic of the state of things) into psychobabble, encouraging us only to focus on our emotions. The NBC financial guru Jean Chatzky even wrote a book titled The Ten Commandments of Financial Happiness, turning our finances into an emotional drama that now came with a Biblical admonition to be happy, damn it.

Instead of feeling guilty and emotional about our debt, perhaps it’s time to consider that debt is a financial condition, not an emotional one. Instead of feeling guilty about our debt, we ought to simply demand solutions to a crisis that was created by a system that reaps the benefits of attaching emotions to money.